I had read about rotating beds before I visited the Don Quixote, but to this day I've never seen one in working order. The Don Quixote was the first place where I saw them, although I've since seen them in a number of other abandoned hotels. They look like they would have been a nice touch, adding some much-needed glamour and excitement, so I became curious about why they have disappeared. A quick search on Google revealed that many Japanese have been wondering the same thing. A generation ago they were apparently common enough to be symbolic of love hotel sex, but today they are all but extinct.
The word on the Internet seemed to be that they were banned as part of a revision to the Entertainment Law in 1985, which seemed like a pointlessly spiteful thing to do, even for a politician. What possible reason could there be for banning rotating beds of all things? After a little research I discovered a rather interesting and esoteric book called Law in Everyday Japan: Sex, Sumo, Suicide, and Statutes, which provided a solution to mystery. They weren't banned as such, but they were an indirect victim of the law.
Apparently various groups of people in the 1980's were opposed to love hotels, or at least wanted them to be more tightly regulated. (Some people just can't stand the thought of other people having fun.) They pressured the government to do something, and the government obliged in 1985 by revising the Entertainment Law to tighten the regulation of love hotels. New love hotels were to be subject to rather onerous regulations. Existing hotels were exempt, but would become subject to the new regulations if they rebuilt or renovated. Apparently determining what qualified as a love hotel for legal purposes proved to be rather difficult, and a number of narrow criteria were used, including the presence of rotating beds and ceiling mirrors.
Hotel operators soon realised that they could easily skirt the regulations simply by omitting a few such features, and registering as regular hotels. Virtually all new hotels chose to do so rather than be subject to the onerous regulations. As existing love hotels deteriorated to the point of needing renovation, they either closed, or ripped out the rotating beds and registered as regular hotels. It's possible that the Don Quixote was one of the hotels that closed as a result of these regulations.
The vast majority of love hotels in Japan today are therefore not registered as such. Business carries on as before, and the only obvious effect of the law is that the décor is blander than it once was. Apparently most of the customers don't mind too much. After all, when you want to make love, you're usually not too worried about the décor. The author even theorizes that the law greatly assisted the love hotel trade by conferring an air of legitimacy on such establishments.
This seems to be something of a recurring theme in Japan - regulate something, but make the regulations deliberately ineffective so that nothing really changes. I don't know if the politicians actually expected their attempt to regulate love hotels to have any effect. Perhaps they deliberately made the regulations easy to evade, so as to look like they were doing something without seriously impacting the love hotel business. No doubt many of the politicians involved liked to patronise such establishments themselves.